REG - Premier Foods plc Premier Foods Fin - Q1 Trading Update

Premier FoodsAnnouncement

20/07/2023 07:00

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RNS Number : 5787G  Premier Foods plc  20 July 2023

20 July 2023

 

 

 

Premier Foods plc (the "Group" or the "Company")

 

 

Strong Quarter 1, full year Trading profit expected to be at top end of market
expectations

Premier Foods today provides its Quarter 1 trading update for the thirteen
weeks ended 1 July 2023

 

 ·         Q1 Group sales up 21.1% versus prior year, Branded sales up 17.5%
 ·         Further Grocery market share(2,3) gains in the quarter, up another 94 basis
           points
 ·         Mr Kipling delivered record market share in Australia and continued to build
           further distribution in the US
 ·         New categories progress continues; sales of Ambrosia Porridge pots and Cape
           Herb & Spice more than doubled
 ·         FY23/24 Trading profit now expected to be at top end of market expectations(4)

 

 

 Alex Whitehouse, Chief Executive Officer

 

"We've made a strong start to the year, sustaining the positive momentum from
previous quarters, with Q1 sales growth of 21.1%, branded sales up 17.5% and
further grocery market share gains. Our sales performance was broad based,
supported by ongoing brand investment, new product development such as Mr
Kipling Brownie Bites and strong instore activation. Our portfolio, which
helps consumers make good value and nutritious, tasty meals at home, continues
to demonstrate a high level of relevance in the current, challenging economic
climate."

 

"We continue to make very good progress on our five pillar growth strategy. In
our International business, Mr Kipling has achieved a record level of market
share in Australia and has now built distribution to 1,400 stores in the US.
New categories sales of both Ambrosia porridge and Cape Herb & Spice more
than doubled, while The Spice Tailor continues to secure incremental
distribution in the UK and overseas."

 

"We believe the recent period of significant input cost inflation is now past
its peak and have no further price increases planned for the rest of 2023.
With this positive momentum, and strong plans behind our leading brands for
the remainder of the year, we now expect FY23/24 Trading profit to be at the
top end of market expectations."

 Trading update

 

Grocery

The Grocery business delivered a very strong performance in the quarter, as
sales increased by 26.7% compared to last year. Branded sales increased by
25.1%, with all major brands well ahead in the quarter, translating into a
further 94 basis points of market share growth. Instore activation was also
strong, and this contributed to an improving volume trend towards the end of
the period. With consumer disposable incomes remaining under pressure, the
Group's Grocery brands continued to demonstrate their relevance, helping
consumers make affordable and nutritious meals at home, and as illustrated by
the Best Restaurant in Town campaign. Expansion into new categories continues
to progress well, and both Ambrosia Porridge pots and Cape Herb & Spice
more than doubled sales compared to the prior year. Non-branded sales were
38.3% ahead of last year and reflected pricing in retailer branded product
categories.

 

Sweet Treats

Sweet Treats sales grew by 7.6% in the period, demonstrating an improving
trend, with branded sales broadly flat and non-Branded sales up 86.2%. Mr
Kipling revenue increased by 3.6%, benefitting from new product launches such
as Signature Brownie Bites and activity commemorating the King's Coronation.
The high growth in Non-branded sales was due to contract gains in pies and
tarts and pricing benefits on existing product lines.

 

International

Overseas sales were 14%(5) higher in Q1. The continued expansion of Mr Kipling
cake in the US has now reached distribution in over 1,400 stores, and
additional seasonal products are planned for launch in the coming months. In
Australia, cake continued its strong progress in market, demonstrated by
record market share of 17.6%(6). Additionally, household penetration of the
Group's cake brands has now increased by a further two percentage points.
Retailer stockholdings decreased in the period which resulted in temporarily
lower order levels, however this has now normalised in quarter two. The
application of the Group's proven branded growth model strategy in Australia
accelerated in the period, with brand investment in the form of television
advertising for Mr Kipling and the launch of a number of new products
including Mr Kipling Signature Brownie Bites. Sales in Europe grew over 30%
due to increased distribution of Sharwood's in Germany and the Netherlands as
part of the Sharwood's European expansion plan.

 

 Outlook

 

The Group has started the year off well, delivering strong sales growth across
its brand portfolio and further Grocery market share gains. Looking ahead,
revenue growth in the Grocery business is expected to moderate in forthcoming
quarters, as year on year effects of higher prices reduce, while the
trajectory for Sweet Treats is expected to build through the second half of
the year.

 

The Company's portfolio continues to demonstrate a high level of relevance to
consumers in the current economic climate. Following a strong first quarter,
and with exciting plans behind the Group's leading brands for the remainder of
the year, it now sees Trading profit for FY23/24 at the top end of market
expectations. In the medium term, the Group expects to unlock further
significant shareholder value through the delivery of its five pillar growth
strategy, as it builds on its successful core UK business and applies this to
new categories, overseas markets and inorganic opportunities.

 

~ Ends ~

 

As one of Britain's largest food producers, we're passionate about food and
believe each and every day we have the opportunity to enrich life for
everyone. Premier Foods employs over 4,000 people operating from 15 sites
across the country, supplying a range of retail,
wholesale, foodservice and other customers with our iconic brands which
feature in millions of homes every day.

 

Through some of the nation's best-loved brands, including Ambrosia,
Batchelors, Bisto, Loyd Grossman, Mr. Kipling, Oxo and Sharwood's, we're
creating great tasting products that contribute to healthy and balanced diets,
while committing to nurturing our people and our local communities, and going
further in the pursuit of a healthier planet, in line with our Purpose of
'Enriching Life Through Food'.

 

Contacts:

 

Institutional investors and analysts:

Duncan Leggett, Chief Financial Officer

Richard Godden, Director of Investor Relations

Investor.relations@premier (mailto:Investor.relations@premier) foods.co.uk

 

Media enquiries:

Sarah Henderson, Director of
Communications

 

Headland

 Ed Young    +44 (0) 7884 666830
 Jack Gault  +44 (0) 7799 089357

 

 

 Conference call

 

A conference call for investors and analysts hosted by Alex Whitehouse, CEO
and Duncan Leggett, CFO, will take place today, 20 July 2023, at 9.00am,
details of which are outlined below.  A replay of the conference call will be
available on the Company's website later in the day:
www.premierfoods.co.uk/investors/results-centre
(http://www.premierfoods.co.uk/investors/results-centre)

 

Telephone number:            0800 358 1035 (UK toll free)

+44 20 4587 0498 (standard international access)

Conference ID: 282669

 

 Telephone number:  0800 358 1035 (UK toll free)
                    +44 20 4587 0498 (standard international access)
                    Conference ID: 282669

 

- Ends -

 

Notes to editors:

 1.        Sales data is for the thirteen weeks to 1 July 2023 and 2 July 2022
 2.        Sales stated above are including The Spice Tailor and excluding Knighton
 3.        Market share data sourced from IRI, 13 weeks ended 1 July 2023
 4.        Company compiled equity analyst forecasts for FY23/24 Trading profit are
           £162.0m - £165.4m
 5.        International sales are stated on a constant currency basis and include The
           Spice Tailor for the period of ownership.
 6.        Australia cake market share source: IRI, 12 weeks ended 18 June 2023.
 7.        All financial data detailed above is unaudited and has not been subject to
           review by the Company's auditors.

 

 Q1 Sales (£m)   FY23/24      FY22/23    Change vs 1 year ago
 Grocery
 Branded         149.2        119.3      25.1%
 Non-branded     22.3         16.1       38.3%
 Total           171.5        135.4      26.7%

 Sweet Treats
 Branded         50.1         50.3       (0.4%)
 Non-branded     9.5          5.1        86.2%
 Total           59.6         55.4       7.6%

 Group
 Branded         199.3        169.6      17.5%
 Non-branded     31.8         21.2       49.8%
 Total           231.1        190.8      21.1%

 

 

This announcement may contain "forward-looking statements" that are based on
estimates and assumptions and are subject to risks and uncertainties.
Forward-looking statements are all statements other than statements of
historical fact or statements in the present tense, and can be identified by
words such as "targets", "aims", "aspires", "assumes", "believes",
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"should", "could", "will", "plans", "predicts" and "potential", as well as the
negatives of these terms and other words of similar meaning. Any
forward-looking statements in this announcement are made based upon Premier
Foods' estimates, expectations and beliefs concerning future events affecting
the Group and subject to a number of known and unknown risks and
uncertainties. Such forward-looking statements are based on numerous
assumptions regarding the Premier Foods Group's present and future business
strategies and the environment in which it will operate, which may prove not
to be accurate. Premier Foods cautions that these forward-looking statements
are not guarantees and that actual results could differ materially from those
expressed or implied in these forward-looking statements. Undue reliance
should, therefore, not be placed on such forward-looking statements. Any
forward-looking statements contained in this announcement apply only as at the
date of this announcement and are not intended to give any assurance as to
future results. Premier Foods will update this announcement as required by
applicable law, including the Prospectus Rules, the Listing Rules, the
Disclosure and Transparency Rules, London Stock Exchange and any other
applicable law or regulations, but otherwise expressly disclaims any
obligation or undertaking to update or revise any forward-looking statement,
whether as a result of new information, future developments or otherwise.

 

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